ANZ to meet expectations

Australia and New Zealand Banking Group yesterday said it would meet market expectations of at least 9 per cent cash earnings per share growth this year, but warned interest margins would decline in the second half.

ANZ chief executive John McFarlane said growth in mortgages, funded largely by wholesale rates, together with a margin squeeze from rising interest rates, were mainly to blame for declining margins, along with competition.

"There has been much said recently regarding net interest margins and competition," McFarlane said.

"Banking is a competitive industry and margins have been contracting for many years. Our approach continues to be to price competitively, but not sub-economically, to maintain our customer franchise and share."

ANZ, one of Australia's four major banks, is due to report its result for the year to September 30 in October.

ANZ said its personal banking businesses in Australia performed particularly strongly for the third year in succession and increased market share.

It said asset growth in mortgages was up 19 per cent and deposit growth was up 11 per cent annualised.

However, subdued demand in institutional markets and the bank's efforts to reduce its risk, would result in a flat institutional result.

Performance in New Zealand, where ANZ paid A$4.9 billion ($5.28 billion) for New Zealand's biggest bank last October, had been reasonable, although systems integration remained complex.

The two New Zealand operations, ANZ and the National Bank, posted an underlying net profit, excluding goodwill and amortisation costs, of $237 million for the June quarter, up 3.9 per cent on the quarter before.

- AGENCIES